The CME and Total Farm Marketing Offices will be Closed Friday, March 29, 2024, in Observance of Good Friday

CORN HIGHLIGHTS:

• Corn futures posted strong double-digit gains after buyers stepped into the market with the USDA report that showed planting intentions and grain stocks were below market expectations. For the week, May corn finished 2 ¾ cents higher.
• The strong price action on the session had May futures post its highest daily close since February 12. With the May futures showing a strong technical close over their 50-day moving average for the first time since October, they could see additional short covering and rally next week. Early week price action will be key in determining follow-through trade from today’s strength.
• The USDA projected corn planting intentions at 90.06 million acres for the upcoming market year. This was 1.7 million acres below expectations and the lowest in the past 2 years. The number of acres may have room to increase by the June Plantings report as 6.3 million acres of principal crop ground was removed from last year’s totals. The USDA is estimating all crop land to total 313.3 million acres, down from 319.6 million acres last year.
• The USDA Quarterly Grain Stocks report for corn showed a total of 8.347 billion bushels of supply, up 12.9% from last year. This total was 80 mb below market expectations as corn usage in the first quarter was stronger than expected. Of those grain stocks, 5.079 billion bushels were stored on farms, up 23% over last year. The large amount of on farm storage could be a limiting factor in corn prices as bushels move in the cash market.
• Weekly export sales reported this morning remain supportive for corn prices. Last week, exporters made new sales of 47.5 mb (1.207 mmt) of corn. This was near the top end of expectations. Cumulative corn sales now reach 1.689 billion bushels, up 19% from last year.

SOYBEAN HIGHLIGHTS:

• Soybeans finished the day mixed with a slight loss in the front months and gains in the new crop. Futures rebounded from sharp losses earlier in the day prior to the release of the USDA Quarterly Stocks and Acreage report. The report was bullish for corn and relatively neutral for soybeans, but soybeans gained positive momentum from the gains in corn.
• Today’s USDA report was very much in line overall with the average trade guesses but still showed more expected soybean acres than last year. The USDA said that 86.51 million acres of soybeans would be planted in 2024 which compares with 83.6 ma last year. US soybean stocks were called at 1.845 billion bushes and were within trade expectations but higher than last year’s 1.687 bb.
• For the week, May soybeans lost just 1 cent, November soybeans lost 3/4 of a cent, May soybean meal lost $1.40 to $337.70, and May soybean oil gained 0.31 cents. Crush margins have declined recently but remain profitable enough to keep processors buying cash soybeans. The domestic demand for soybeans is needed as export sales have been very slow.
• With significant discrepancies between CONAB’s and the USDA’s estimates for Brazilian soybean production, Brazilian consultancy Agroconsult has now increased their estimates to 156.5 mmt citing an expansion of estimated planted area. This estimate is much closer to the USDA’s guess of 157 mmt and brings doubts to CONAB’s guess of 149 mmt.

WHEAT HIGHLIGHTS:

• Wheat closed higher in both Chicago and KC contracts, while posting small losses for Minneapolis. A lower acreage number than anticipated helped winter wheat to rally, while higher spring wheat acreage weighed on Minneapolis futures. The sharp rise in corn futures and a higher close for Matif wheat, which reversed from the recent downtrend, also added support.
• In today’s Quarterly Stocks and Acreage report, total wheat acreage was reported at 47.5 million acres, slightly below the trade estimate of 47.7 million acres and a 3% decrease from last year’s 49.6 million acres. Notably, winter wheat acreage declined to 34.1 million acres, down 7% from 36.7 million acres the previous year. However, spring wheat acreage reached 11.3 million acres, exceeding both the trade estimate of 10.9 million acres and last year’s 11.2 million acres.
• Quarterly wheat stocks at 1.087 bb were above the average trade guess of 1.053 bb, and above last year’s 941 mb by 16%. When broken down, on farm stocks were estimated to be 271.9 mb, with off farm stocks at 815.5 mb.
• Today the USDA also released weekly export sales. The USDA reported an increase of 12.5 mb in wheat export sales for 23/24, along with an increase of 7.8 mb for 24/25. However, last week’s shipments of 15.0 mb were below the 18.2 mb needed per week to reach the USDA’s export goal of 710 mb. So far, wheat sales commitments total 688 mb, up 4% from last year.
• In other news, the European Commission estimated that EU soft wheat production will decline 4% year-on-year to 120.8 mmt from 125.6 mmt, previously. Wet weather in the fall caused issues for planting, and France has crop conditions well below last year. And while exports are expected to have little change around 31 mmt, stocks may decline from 19.9 to 12.1 mmt.
• According to the USDA, as of March 26, approximately 17% of the US winter wheat crop is experiencing drought, along with 25% of the spring wheat area. For winter wheat, this is an increase from 12% the week prior, while spring wheat declined from 30% a week ago.

DAIRY HIGHLIGHTS:

• Class III milk was 5 to 15 cents lower for the remaining 2024 contracts, bringing the average to $17.05.
• Spot cheese was up 0.8750 cents to close the week at $1.4225/lb, up 1.375 cents on the week. Spot whey gained 0.75 cents on the shortened week to close at $0.4025/lb.
• Class IV futures were unchanged to lower today as well with the second month April down 7 cents to $19.80.
• Spot butter was up 3.50 cents this week to close at $2.8425/lb while powder gained 1.25 cents with a $1.12/lb close.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

John Heinberg